- A number of Amazon Delivery Service Partners (DSPs) across the country have announced layoffs this month.
- Business Insider has learned that Letter Ride, an Amazon DSP, is laying off nearly 900 workers in California and Texas. These companies deliver Amazon packages to customers' homes.
- Several outlets previously reported layoffs in Georgia, North Carolina, Ohio, Texas, Mass. And Conn. After the DSPs lost Amazon contracts.
- Visit the Business Insiders homepage for more stories.
A number of Amazon Delivery Service Partners (DSPs) delivering packages to customers' homes have announced layoffs this month.
Business Insider has learned that Letter Ride, an Amazon DSP, is laying off nearly 900 workers in California and Texas. The last mile company delivered alerts on adjustment of work and retraining in both states. It did not immediately respond to requests for comment.
Nationwide, more than 900 employees at Urban Mobility Now and Inpax both learned last-mile delivery services for Amazon in recent weeks that they would be laid off. Drivers, broadcasters and managers will be affected. Another DSP, Sheard-Loman Transport, said last month that it planned to fire 200 employees in three states because of the expiration of its Amazon contract, BuzzFeed News reports Friday.
DSPs are small third-party vendors that typically work exclusively for Amazon. Amazon puts DSPs in charge of drivers' salaries, insurance, health benefits and vehicle maintenance.
"We work with a number of transportation partners to get packages for Amazon customers, and we regularly evaluate our partnerships," a company spokesman told Business Insider. "We have ended our relationship with these companies, and drivers are supported with the opportunity to deliver Amazon packages with other local Delivery Service Partners."
Amazon, meanwhile, retains power over many other aspects of these drivers' jobs, according to legal filings and interviews with more than 40 delivery workers, including drivers, supervisors, courier owners and Amazon logistics managers.
For Amazon, this system of delivering delivery jobs is a cost-effective alternative to direct hiring. [1
"This mass resignation is expected to be permanent, "Inpax CEO Leonard Wright said in his letter to the state of Georgia, according to a document published by the Atlanta Business Chronicle.
Here is a list of layoffs we already know about:
- Letter Ride, Texas, eliminated 423 jobs
- Letter Ride, California, 474 jobs eliminated
- Inpax, Georgia, 162 jobs eliminated
- Inpax , North Carolina, eliminated 199 jobs
- Inpax, Ohio, eliminated 64 jobs
- Inpax, Texas, eliminated 228 jobs
- Urban Mobility Now, Massachusetts, eliminated 201 jobs
- Urban Mobility Now, Connecticut, 74 jobs eliminated
- Sheard-Loman Transport, 200 jobs eliminated
Amazon confirmed that it ended the relationship with these three DSPs, and that the company will support licensed drivers with new DSP capabilities.
Inpax declined to comment on this story. Urban Mobility Now, which did not answer the phones, has already closed the website and pages on LinkedIn and Facebook, and could not be reached for comment.
Amazon contracts may prove to be pitfalls for logistics companies
Amazon has actively expanded its logistics network as it becomes its own largest supplier of deliveries. As part of the growth, it has recruited and hired dozens of people over the past year to start and run new DSP companies that deliver Amazon packages. Each of these companies is expected to eventually expand their fleets to 40 cars.
Read more: "Amazon Has All the Power": How Amazon Controls Legions of Delivery Drivers Without Paying Salaries and Benefits
The layoffs may be a sign that Amazon is moving to rely more on these newer, smaller companies over their older partners.
At the same time, Amazon has moved other parts of its logistics business internally as it grows a network of aircraft, trucks, vans and even ocean freight. The purchasing motions have been particularly taxable for companies providing Amazon's delivery services.
This is because the companies Amazon uses for logistics often rely on the retail giant for a large portion of revenue, so when Amazon declines In February, Amazon's move to move its own packages $ 600 million in expected revenue at XPO Logistics – the top US logistics company in revenue in 2018. XPO's leading Amazon business with parcels took the company and delivered them through the U.S. Postal Service, otherwise known as "postal injection," Seaport Global analyst Kevin Sterling previously told Business Insider.
Read more: Amazon took over the $ 176 billion market for cloud computing. Now it uses the same logbook in logistics.
A $ 402 million shipment company went to February, a bankruptcy that analysts said was partly due to Amazon's moves.
Other companies have found that Amazon is a big customer, but not one that drives massive profits. In May, FedEx unexpectedly announced that they will no longer fly Amazon packages.
A Business Insider report showed that it may have been motivated by the low margins Amazon packages have. While FedEx's network had a lot of packages, the company's accounts indicated that the huge amount of packages did not make much profit.